What Registration of a Partnership Firm Is Important?

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A partnership firm is a popular form of business in which a minimum of two people is required. A partnership firm is established and divides its profit in an agreed ratio. Partnership firm is regulated and controlled by the Indian Partnership Act, of 1932. A partnership firm is easy to incorporate, less complicated, and decisions can be taken quickly.

However, the partnership firm does not have perpetual succession and has limited resources. Registration of a partnership firm with the registrar of the firm is not compulsory but it is beneficial to get your firm registration

What is partnership registration?

Partnership registration is registering your partnership firm. Partners may register it under the registrar of firms of the state where the firm is located. encouraging elevated efficiency and productivity in Pune
serious business climate. This approach permits businesses to zero in on center activities while guaranteeing smooth-out monetary management under the direction of accounting firms. The partners may apply for registration of a partnership firm at the formation of a company or during the time of operation as it is not compulsory to ret your
partnership firm registration.

Importance of partnership registration

As it is optional for firms to register. However, it is always advised to register your partnership firm registered to enjoy special rights and benefits after it becomes a registered partnership firm.  

The benefits of a partnership firm which they can enjoy after registering themselves under the Indian Partnership Act, 1932 are:

  1. Any partner can sue any partner of the firm or partnership firm for enforcing the right arising from any contract. This benefit can be enjoyed only if the partnership firm is registered. In the case of an unregistered firm, partners cannot sue any partner or partnership firm.
  2. A registered partnership firm can sue a third party for enforcing the right from any contract. However, an unregistered partnership cannot sue any third party for enforcing the right. On the other hand, a third party can file a suit against the partnership firm that is not registered under the Indian partnership firm, 1932.
  3. It is easy to convert a partnership firm into any other form of business if the firm is registered. An unregistered partnership firm can not easily convert itself. 
  4. It grants the power to claim set-off against any third party arising from a contract. But the unregistered firm cannot claim set off in any prospect against anyone.
  5. A registered partnership firm may look more credible than an unregistered partnership firm in the eyes of potential clients. 


To enjoy all these benefits a firm should be registered. It only takes 10 to 14 working days to get any partnership firm registered. Moreover, if a partnership is not registered, the court may announce a partnership invalid. When all partners except one or all partners become insolvent, a dissolution can be brought upon. Under the Income Tax Act, of 1961, a partnership firm is liable to pay 30% income tax, 12% interest on capital, 12%surcharges, and 4% health and education cess. For NRIs, there are nri tax planning firms in India.


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